Introduction to Sociology/Stratification

Every semester, I use an activity to introduce my students to economic inequalities. First, I split them into groups of 3 to 5 people. Next, I put a series of average costs for living in our county on the board in the form of an easily readable Powerpoint slide (i.e., average rent, average cost of transportation with and without a car, average utility bill, average health insurance cost, etc., etc.). Then, I assign each group a household income (i.e., an income the 3 – 5 of them make together and must live off of as a family). The household income I give them varies due to official variations, but it is always just barely above the cutoff for receiving aid so the students have to try to “make due” without any handouts. Finally, I have the students design a budget for their family based upon the combination of average costs and their total income. After they are finished, we discuss their budgets as a class.

While this exercise is rudimentary and will not actually cause them any real world trouble, I find it fascinating that the most “just work harder,” “self made American,” and “pull yourself up by your bootstraps” students very quickly decide they will run meth labs out of their houses, figure out ways to scam other people out of money, beg for money on the streets, or otherwise suggest the only way they could survive managing wages and costs typical among the working poor of America would be by breaking the law or (in the words of more than one student so far) “living like an animal.” After a bit of discussion, I ask them why don’t they “pull themselves up by their bootstraps” and they very quickly realize that’s not really possible when you can’t even afford the bootstraps. Finally, I ask them how the money their families had (or didn’t have) contributed to the difference between them sitting in a college classroom and starting their own meth lab.

Stratification refers to the hierarchical arrangement of people in a society. This chapter focuses on economic stratification; meaning how people are differentiated based upon their wealth (and/or power). Sociology has a long history of studying stratification and teaching about various kinds of inequality, including economic inequality, racial/ethnic inequality, gender inequality, and other types of inequality. Inequality means people have unequal access to scarce and valued resources in society. These resources might be economic or political, such as health care, education, jobs, property and land ownership, housing, and ability to influence government policy.

Statistics on United States and global inequality are widespread and alarming. Consider this:

Just 400 Americans have the same wealth as half of all Americans combined[3]

Just 25 Americans have a combined income almost as great as the combined income of 2 billion of the world’s poor.[4]

In 2007, more than 37 million U.S. citizens, or 12.5 percent of the population, were classified as poor by the Census Bureau.[1]

In 2007, CEOs in the fortune 500 received an average of $10.5 million, 344 times the pay of the average worker.[1]

Four of the wealthiest people in the world come from one family, the Walton’s. They are the four children who inherited Sam Walton’s company Wal-Mart. Together, they are worth $83.6 billion.[5]

Half of American children will reside in a household that uses food stamps at some point during childhood.[6]

Although inequality is everywhere, there are many controversies and questions about inequality that sociologists are interested in such as where did inequality come from? Why does it continue? Do we justify inequality? Can we eliminate inequality? Can we make a society in which people are equal? Before answering these complex questions, we will broadly define socioeconomic status and social class in America. The chapter then turns to dominant theories on stratification, and explores class, race, and gender inequality in more detail. We look at how capitalism is an important context in inequality. We end with consequences of inequality and theories explaining global inequality.

Building on the ideas of Max Weber, who saw three main dimensions of stratification (class, status, and party), contemporary sociologists often define stratification in terms of socioeconomic status (or SES). There are a variety of ways to measure SES, including educational attainment, income, wealth, and occupational prestige. These measures reflect three characteristics of individuals: power, property, and prestige. These three characteristics combine to indicate someone’s social class or socioeconomic status.

Power refers to someone’s ability to get others to do his/her will, regardless of whether or not they want to. Legitimate power, power given to individuals willingly by others, is called authority. Illegitimate power, power taken by force or the threat of force, is called coercion.

Property, as used in this context, refers to the sum total of one’s possessions as well as their regular income. Property goes beyond income as a measure of social class as it reflects the accumulated wealth (e.g., homes, stocks, bonds, savings and how many children you have) in addition to one’s earning potential and accumulated debt. Property is a better overall measure of social class than income as many individuals who are considered wealthy actually have very small incomes.

Prestige refers to the reputation or esteem associated with one’s position in society. Prestige used to be associated with one's family name, but for most people in developed countries, prestige is now generally tied to one's occupation. Occupations like physicians or lawyers tend to have more prestige associated with them than occupations like bartender or janitor. An individual’s prestige is closely tied to their social class – the higher the prestige of an individual (through their occupation or maybe family name), the higher the social class.

These three indicators tend to go hand-in-hand or lead to each other, such as a Supreme Court justice who is usually wealthy, enjoys a great deal of prestige, and exercises significant power. In some cases, however, a person ranks differently on these indicators, such as funeral directors. Their prestige is fairly low, but most have higher incomes than college professors, who are among the most educated people in America and have high prestige.[7]

Sociologists Dennis Gilbert and Joseph Kahl developed a model of the American class social class structure. Briefly, the upper class in America (3% of the population) is divided into upper-upper class (1% of the U.S. population), earning hundreds of millions to billions in income per year while the lower-upper class (2%) earns millions in annual income. The middle class (40%) is divided into upper-middle class (14%) earning $76,000 or more per year while the lower-middle class (26%) earns $46,000 to $75,000. The working class (30%) earns $19,000 to $45,000. The lower class (27%) is divided into working poor (13%, earning $9000 to 18,000) and underclass (14%, earning under $9000).[7]

Among America’s working class and working poor are hotel housekeepers, waitresses, house maids, and retail clerks. In Nickel and Dimed: On (Not) Getting by in America, Barbara Ehrenreich describes her experience of working a series of low-wage jobs in 1998 and trying to survive on her wages. Among other low-wage jobs, she worked in Wal-Mart, earning $6.00 per hour. In addition to trying to survive on her wages, she described how working overtime without pay was the custom at Wal-Mart. Managers informed workers to punch out of the time clock and to begin some additional work (without pay).[8]

Because of the Great Recession from 2007-2009, the gap between the rich and poor has increased in America. Today, the richest one percent of Americans earn nearly a quarter of the country’s income and control 40 percent of its wealth. The gap between the wealth of white families and the wealth of African-American families and Hispanics has also increased. The average wealth of a white family in 2009 was 20 times greater than that of the average black family, and 18 times greater than the average Hispanic family. In other words, the average white family had $113,149 in net worth, compared to $6,325 for Hispanics and $5,677 for African-Americans.[9]

The origins of inequality can be found in the transition from hunter/gatherer societies to horticultural/pastoralist societies. Here, it might be useful to describe a few characteristics of these societies.

In hunter/gather societies, (around 50,000 B.C.), small groups of people gathered what they could find and they also hunted and fished. People grew and collected their food for all of their needs. There was very little trading between the groups and there were not many inequalities between groups. There was not a surplus of goods. Everyone possessed basically the same as everyone else. The division of labor was small. People did almost the same jobs as each other. Food gathering and food production was the focus of work.

In horticultural/pastoralist societies (around 12,000 B.C.), groups grew to be very large and humans settled down in one place. For the first time, people had more time to do other work besides producing food, such as making leather and making weapons and other special skills. This new division of labor led to surplus of goods. The groups then traded with each other. This led to inequality because some people accumulated more possessions than others.

Fast forward many millennia later to just before Industrialization began. In the 14th, 15th, and 16th centuries, there was collectivity in the space and land in Europe. Life was brutal and harsh, but there was a joint and shared responsibility in the way people lived their lives and went about their work. People farmed land in a collective way because they saw it as something for everyone to take care of and for everyone to enjoy the fruits of their labor.[10]

The concept of private taking and private property began to flourish in the late 15th century beginning in Europe and spreading around the world. Jean-Jacques Rousseau linked private property with inequality in his book, Discourse on Inequality. Collective land and space, once shared by all, began to be divided up into private takings and private ownership (and this continues today). Land, oceans, and air, once shared by everyone in the world, began being bought and sold like products in a store. The great land masses of the world were reduced to private property. Laws and regulations were created that allowed a country to claim a certain amount of water for exploitation. Air was divided into air corridors that were bought and sold for commercial traffic for airplanes. Today, the right to private property is an important value in most societies. With deregulation, privatization, and free trade, we continue to see a private taking and private ownership of entities once shared by everyone.[10]

The idea that there should be equality in society emerged in the 17th and 18th centuries in the writings of Hobbes and Locke. Their thinking helped people consider that inequality was the result of the actions and intentions of social institutions and specific groups and not the will of God. Even so, the question of the origin of inequality remains today in addition to why inequality continues.

Sociologist Joel Charon[11] offers a few reasons why inequality continues in society. His arguments reflect social reproduction theory, which focuses on the roles of institutions and cultures in the perpetuation of inequality and the process by which the social class structure is maintained. First, the rich and powerful protect the system of inequality. They are typically the owners of the means of production (factories, machinery, land, transportation) and have the resources to protect themselves and their positions. This control is heightened in societies with advanced technology as more developed technology facilitates the ability of the wealthy to pass on their wealth to their offspring.[12] For instance, in modern societies, the transition of wealth is basically as simple as changing the names on the bank accounts or transferring stock from parents to children, which can be done at the push of a button. But in less developed economies - like hunter-gatherer or pastoralist - the transmission of wealth is far more difficult as it involves the physical transferring of goods. Thus, technology has the potential to substantially heighten inequality by facilitating the intergenerational transmission of wealth.

Karl Marx argued that the rich and powerful have control over the means of production, which is economic power, and they also have great influence on government power, including the rules governments follow, the people who work for the government, and the laws governments make. The rich and powerful also have control over the media, the schools, the courts, and many other parts of society and they support institutions (religion, economy, and education) that favor them. For example, the Walton family made $3.2 million in political contributions in 2004.[13] The Waltons have great economic power and also the ability to influence government through large donations to political actors that protect their positions and their businesses. Inequality continues because those at the top protect their positions and use their power to influence other parts of society.[11]

Second, culture teaches the acceptance of inequality. Research shows that Americans believe in equality. Research also shows that Americans view inequality as justified.[1] One belief system that people commonly embrace--mistakenly, according to contemporary economic research-- is that the rich and powerful are more talented, hardworking, and intellectually superior and thus more deserving. The poor are poor because they are lazy or irresponsible or unmotivated. If they can’t make it, it is their fault. These are ideologies that protect the system of inequality. These ideologies legitimatize the position of the rich and powerful and explain and justify the position of the poor.[11][14] People tend to accept inequality, not because they are happy with their situation, but because over time people believe their situation is natural and normal and it is what they expect from life.

In the United States, important cultural values are taught early on which support the system of inequality. These include a focus on the individual, a value of hard work, measurable achievement, and the ‘sacred’ ideal of equal opportunity. People accept as truth these beliefs: ‘If you work hard, you can rise to the top.’ ‘You can be anything you want to be.’ ‘Where there’s a will, there’s a way.’ ‘America is the land of opportunity; anyone can make it if they try hard enough.’ ‘Work hard, get an education, and don’t give up when the going gets rough.’ These values support the inequality that already exists and these values deny the impacts of inequality.[11][14]

The American dream contains the belief that every individual can achieve prosperity and success through hard work and self discipline. For example, U.S. President Barack Obama said in a speech in 2005, “…whether chance of birth or circumstance decides life’s big winners and losers, or whether we build a community where, at the very least, everyone has a chance to work hard, get ahead, and reach their dreams.”[15] While these might be inspirational words, they focus on the individual and leave out the social structural causes of inequality and poverty, such as the high unemployment rate, inheritance laws that allow families to pass on wealth, lack of state supported child care or health care, and tax policies that favor the wealthy. As a startling example, the Walton family received a federal tax cut of $91,500 per hour during the 2004 tax year.[13]

Third, people are socialized to accept their position in life. The rich and powerful socialize their children to expect wealth and power. Parents, teachers, and friends show us our position in society and teach us to expect that same level.[11] Parents who attended prestigious boarding schools and Ivy League colleges such as Harvard, Yale, or Princeton expect their future offspring will attend such schools. Harvard researcher Michael Hurwitz found that legacy students were 45% more likely to be admitted to elite colleges.[16]

A 2015 analysis of schools in the District of Columbia illustrates how wealth perpetuates wealth.[17] The very best schools in the District of Columbia were located in areas where median home prices were very high, close to $800,000. The worst schools were located in areas where median home prices were very low. In other words, in order to send a child to a top school, parents had to live in a home that cost close to $800,000 to purchase it, otherwise the students would get an inferior education. This illustrates how inequality and stratification get passed on from generation to generation, as children raised in wealthy families get the best education.

Ivy League colleges, private country clubs, debutante balls (a formal introduction and presentation of young women to society) and the social register (a book listing the most important and famous American families) are ways that the wealthy maintain their cohesion and pass on their prestigious positions to their children.[18]

In addition, education helps to reinforce an acceptance of inequality and education prepares each social class differently, depending on the roles they will play when leaving school.[11] This means teaching the appropriate skills but also the appropriate values for each social class. Elementary and high schools in the U.S., in particular, teach different values to different social classes. Working-class students learn obedience; upper-middle class students learn leadership and creativity.[1] Upper-middle class students participate in activities that focus on public performance and skill development. Working-class students participate in informal play, visiting family, and ‘hanging out.’[19] Socialization brings the acceptance of a culture that justifies inequality, and it normally brings an acceptance of one’s relative position in the system of inequality.

Finally, police, courts, and prisons work together to protect the system of inequality. Research has shown that the criminal justice system in the U.S. is biased against the poor from start to finish, from the definition of what constitutes a crime through the process of arrest, trial, and sentencing.[20]

Much of society seems to encourage and protect the system of inequality. Given all of these ways inequality is perpetuated in a society, is it at all possible to eliminate it?

Inequality and poverty didn’t just drop down from the sky, like an apple does from a tree. The previous section shows it is embedded in society in many ways, but if the conditions that generate social inequality are conscious and intentional creations of human actions, they can be changed. We will examine this complex issue in the next section.

The structural-functional approach to stratification asks the same question that it does of the other components of society: What function or purpose does it serve? The answer is that all parts of society, even poverty, contribute in some way to the larger system’s overall stability, according to this theory. Stratification and inequalities are inevitable and beneficial to society. The layers (sorting of unequal people. The layering is useful because it ensures that the best people are at the top and those who are less worthy are further down the pyramid and therefore have less power and are given fewer rewards than the high quality people at the top. Inequality ensures that the most functionally important jobs are filled by the best qualified people. In other words, it makes sense for the CEO of a company whose position is more important functionally to make more money than a janitor working for the same company. A job’s functional importance is determined by the degree to which the job is unique, meaning whether few other people can perform the same function adequately. Garbage collectors are important to public sanitation, but do not need to be rewarded highly, because little training or talent is required to perform their job. Doctors should be rewarded highly, because great training is required to do their job. It is logical that society must offer greater rewards (e.g., income, vacations, promotion) to motivate the most qualified people to fill the most important positions.[1]

There are several obvious problems with this approach to stratification. First, it is difficult to determine the functional importance of any job, as the accompanying specialization and inter-dependence make every position necessary to the overall operation. The engineers in a factory for example are just as important as the other workers in the factory to the success of a project. In another example, a primary school teacher in the U.S. earns $29,000 per year whereas a National Basketball Association Player can earn as much as $21 million per year. Are basketball players more essential to society than teachers? Are basketball players more functionally important than teachers? In 2009, comedian Jerry Seinfeld earned $85 million. Do his earnings demonstrate his contribution to society? If NBA players or famous comedians went on strike and decided not to work, most people would not notice. However, if teachers, bus drivers, nurses, cleaners, garbage collectors, or waitresses stopped working, society would close down. There is little connection between income and jobs that are functionally important in a society.[1][7]

Second, this approach assumes that the system of stratification is fair and rational, and that the ‘best’ people end up on top because of their superiority. But, in real life, the system does not work so easily or perfectly. Former U.S. president George W. Bush, for example, was not the smartest or most politically talented individual but he was well connected and born at the top of the stratification system (white, male, wealthy, American, heterosexual), and therefore was elected to a position with great power – the U.S. presidency.

Another problem with this approach is that it assumes that only a few ‘chosen’ people should have all the power and all the material wealth, rather than distributing it equitably, or distributing it to those who need it most. Sociology is the change of society.

Conflict theorists argue that stratification is dysfunctional and harmful in society. Stratification benefits the rich and powerful at the expense of the poor. For example, many wealthy families pay low wages to nannies to care for their children, gardeners to attend to their rose gardens and maids to pick up their dirty socks. Capitalism, in particular, benefits the rich. Corporate welfare is one example where an arrangement of direct subsidies, tax breaks, and other support that the government has created for big businesses.[7] As mentioned previously, the Walton family receives enormous tax breaks. Inequality is inevitable within a system that has individual competition at its core, and therefore, ‘winners’ and ‘losers.’ Conflict theorists believe that this competitive system, together with the way the game is ‘fixed’, ends up creating and perpetuating stratification systems. Competition and inequality are not inevitable but are created and maintained by people.

Functionalists criticize this approach by arguing that people do not always act largely out of economic self-interest. For example, Chuck Feeney, the creator of Duty Free Shoppers, has given $4 billion to charities.[7] Bill Gates has given 58% of his wealth to charity. In contrast, the Walton family has given less than 1% of their wealth to charity.[13] Functionalists also argue that conflict theorists underestimate people’s ability to move upward in society. They argue that if people really want to succeed, they can do so through hard work.[7]

Societies could be redesigned so that they are based on cooperation. Marxists argue that a central component of a more equitable and humane society would be based on the idea, “from each according to their ability, to each according to their need.” In other words, each person should produce or work to the best of their ability according to their talents, and each person should receive the fruits of this labor according to their need, irrespective of what they have produced. Conflict theorists also believe that democracy or some sort of group decision making is more humane and more effective. Stratification systems that concentrate decision making and power in the hands of a few are destined to not serve the interests of most people at the bottom of the pyramid.

Economic class, in conjunction with race and gender, shape the opportunities, the privileges, and the inequalities experienced for individuals and groups. The United States continues to be greatly stratified along these three lines. This was seen when Hurricane Katrina hit in 2005. In New Orleans, the roles of class, race, and gender were made apparent to the U.S. public. Many of the televised images showed poor, African Americans, many who were women and their children, abandoned in the storm, without resources for several days and without basic necessities of food and water. Though the storm displaced hundreds of people from all backgrounds, classes, colors and gender ‘equally,’ all were not affected the same.[21] The wealthy had cars to leave New Orleans, and credit cards and bank accounts for emergency hotels and supplies. They also had insurance policies for rebuilding. The unequal impact of this tragedy was not unique. In the sinking of the Titanic in 1912 for example, 60% of first class passengers survived, while only 24% of third class passengers survived. One child in first class died, while 49 children in third class died. The poor in the U.S. and around the world are most likely to suffer from ‘natural’ and human tragedies.[22][23]

Class plays an important role in the forms of privilege and oppression. Capitalism produces enormous amounts of wealth, in addition to increasing levels of inequality, both within the U.S. and around the world. These inequalities result from a class system based on increasing gaps in income, wealth, and power between the few people on top and the masses of people at the bottom. Capitalism is a system that produces cruel consequences. For those at the bottom, the costs are great, with living conditions among the poor comparable to those found in developing countries. Capitalism causes competition, stress, and anxiety among members of the working class and middle class, as people do not have any control over their work and whether they can keep their jobs.[14] Despite the myth that hard work leads to getting ahead and making it, for the most part people have little power to improve their class position. Research shows people are as likely to move downward as they are upward in the class system. Currently, corporate downsizing, the loss of industrial jobs going overseas, the expansion of low-paying service occupations, and the Great Recession beginning in 2007, have combined to result in many people struggling to keep the jobs that they have, rather than being able to move upward.[14]

The increase of immigrants in the U.S. and the loss of jobs to other countries illustrate a core belief that the greatest problem American workers experience is unfair competition from immigrants in the U.S. and workers abroad. The belief, ‘they are taking our jobs’ ignores the capitalist system itself, which by its nature increases the wealth of the few owners by controlling workers and keeping wages as low as possible, and it allows a few owners to control the majority of wealth, leaving a tiny share to be distributed among everyone else.[14]

Capitalism also takes advantage of gender inequality. Women workers are exploited for cheap labor as nannies and maids in New York, in clothing sweatshops in Los Angeles, and on rose farms in Ethiopia which pay women a dollar a day. Wal-Mart, the nation’s largest private employer, in particular has been accused of discrimination against women. Although over seventy percent of Wal-Mart’s hourly workers are female, they account for only a third of all management. Wal-Mart has been sued for unfair practices in the training, payment, and promotion of its female employees.[24] Capitalism would no longer function if the mass of women stopped doing the shopping, cooking, cleaning, and caretaking. For the most part, women raise the next generation of workers on which capitalism depends. Women do this work without receiving any extra pay or benefits.[14]

Stratification occurs in small groups and face-to-face interaction. At the beginning of the chapter, we looked at how stratification begins when we are young. Clothing, expensive toys, a new bicycle, a fancy car, and what job our parents had (and even whether or not we had parents) were symbols that differentiated us and separated us in elementary schools and impacted which friends we played with and the interactions we had.

Throughout our lives, wealth, power, and prestige are given to individuals who have knowledge and access to important information and influential people in society. Gender and race influence our degrees of networks, as well as individual qualities of leadership, self confidence, and physical attractiveness.[2]

Our positions and connections in organizations and institutions lie within the stratification system. This impacts how we experience life and how we interact with other individuals and groups.[2] As mentioned earlier, parents, teachers, and friends show us our position in society and teach us to expect that same level. Education prepares each social class differently, with different skills and values taught to each class. The police, courts, and prisons reinforce the stratification system. Our position in the system reflects the type of health care we receive. All of these institutions support the stratification system by favoring the rich and powerful.

Our position in the international economic system in the world shapes our opportunities throughout our life and our access to important resources. Let’s look at Cape Verde as an example. Located 450 kilometers off the coast of Senegal, West Africa, it is geographically and economically isolated from the rest of the world. (See Picture 1.) About one quarter of the population remains unemployed and an additional 26 percent are underemployed. The poverty rate in 2003 was 37 percent including 20 percent who are identified as extremely poor. The country is ranked 38 in the Human Poverty Index by the United Nations. Cape Verde is a debtor nation with a total external debt of $360 million at the end of 2002. Besides being in debt to countries of the North, (the U.S. and Europe) Cape Verde is part of the global economy in other ways. The country’s major industries are owned by nations of the North. Forty-nine percent of the banks, hotels, airlines and shipping lines formerly owned by the Cape Verdean government have been sold to foreign investors. In addition, Portuguese investors own forty percent of the state telecommunications company. The dominance of foreigner investors in even the industries that supply the most basic needs, such as water, are a result of policies of privatization, a key element of neoliberal and Washington Consensus economic “reforms.” (See Picture 2). And the International Monetary Fund continues to push its privatization drive demanding that Cape Verde privatize its few remaining public enterprises, including the national airlines, the national oil supply company, the national transportation company, and others. Both the country’s private sector business class and low-income households have been greatly impacted, experiencing job loss and price hikes. On one island, the increased cost of privatized energy has forced people who cannot afford the electricity to return to traditional oil lamps. Low-income women especially have been impacted from structural adjustment programs, which have cut governmental provisions on health, education, and food. Macro level factors such as policies implemented by the World Bank and International Monetary fund impact the job opportunities, prices of food, water, and electricity, and day to day life for citizens in Cape Verde and around the world.[25] (See picture 3).

In the opening paragraph and throughout this chapter, we presented many consequences of inequality. What class we belong to directly relates to our individual life chances. Let’s look at a few more points in detail. The wealthy and well-educated are much more likely to be in good health, and have access to good medical care than the poor. The poor have shorter life expectancies and are at greater risk for chronic illnesses. Children born into poor families are at much greater risk of dying during their first year of life from disease, accidents, or violence. When medical attention is needed, its huge cost prevents the poor from seeking care. For many, the high cost of insurance prevents Americans from having good medical care. Approximately 45.7 million people in the United States were without health insurance coverage in 2007. Hunger is also connected to class. It is estimated that 13 percent of children under age 12 are hungry or at risk of being hungry. Among the working poor, almost 75% of the children are thought to be in this category. In addition to the high cost of food, the lack of affordable housing is a critical concern for poor families and many families live in weekly hotels which are cheaper than paying monthly rent. In Orange County, California, low-income parents working full-time at Disneyland for $9 per hour still struggle to find affordable housing, so parents with young children live across the street in motels.[26][27]

The poor are not able to provide the same educational opportunities for their children as the wealthy are. School districts in wealthy suburban areas tend to pay higher teachers’ salaries, have newer buildings, and provide sophisticated equipment. Students in central city schools and poverty stricken rural areas often attend rundown schools that lack necessary equipment and teaching materials.[27] Poverty and thoughts related to poverty may take up so many cognitive resources for the poor that it actually impedes cognitive functioning, which accounts, in part, for the lower IQs measured among poor people.[28]

Private tutors, SAT preparation courses, and charter schools allow children from wealthy families to gain entrance to elite colleges and find jobs more quickly after graduation. And, as previously mentioned, their children have a good chance of attending the same elite college. The cycle of wealth, power, and prestige continues.

Our final section explores global inequality.

Percentage of countries' population living on less than $2 per day, 2009.

Percentage of countries' populations living below their respective poverty lines.

Picture 4. Children enjoying traditional bread during a celebration in Ethiopia.

Almost half the world, over 3 billion people, lives on less than $2.50 a day. 78 percent of Ethiopians earn less than $2.00 a day. (See Pictures 4, 5, and 6). 86% of the population in Zambia lives in poverty while 4% of the population in Belgium lives in poverty.[29][30] Why is there such a large gap between Zambia and Belgium? Why are the poor still poor? Who is to blame for poverty? Social scientists offer a few theories which help to explain the causes and consequences of global inequality.

This theory blames tradition for global poverty. These theorists argue poor societies stay poor because they hold onto traditional attitudes and beliefs, technologies and institutions, such as traditional economic systems and forms of government. In contrast, in the modern world, the rise of capitalism brought modern attitudes, modern technologies such as machinery and electronics, and modern institutions which helped countries progress and have a higher standard of living. Given enough time, modernization will occur everywhere in the world. Eventually global capitalism and its modern corporations will hold these modern ideas, technical innovations, and efficient institutions everywhere. Modernists believe large economic growth is the key to reducing poverty in poor countries.

This theory blames colonialism and neocolonialism (continuing economic dependence on former colonial countries) for global poverty. Countries have developed at an uneven rate because wealthy countries have exploited poor countries in the past and today through foreign debt and transnational corporations (TNCs). Historically, wealthy nations have taken a great quantity of materials from poor countries such as minerals and metals necessary to make automobiles, weapons, and jewelry in wealthy countries. In addition, large amounts of agricultural products that can only be grown in the hot climates of the poor countries have been taken and exported and manufactured in the wealthy countries such as coffee, tea, sugar, and cocoa. Wealthy countries would not be as rich as they are today if they did not have these materials. Also, wealthy countries increased their own profits by organizing cheap labor through slavery. King Leopold II, for example, who was King of Belgium from 1865-1909, forced hundreds of thousands of men, women, and children to work as slaves in the Democratic Republic of Congo. The invention of the bicycle tire in the 1890’s and later the automobile tire meant that rubber was in high demand, and wild rubber vines were widespread in the Congo, earning Leopold millions.[31] The Democratic Republic of Congo is still suffering today from the plunder of resources and the torture and killing of millions during Leopold’s rule.

Dependency theorists believe large economic growth is not necessarily the key to reducing poverty and developing. Instead, poor countries are trapped by large debts which prevent them from developing. For example, between 1970 and 2002, the continent of Africa received $540 billion in loans from wealthy nations and from the World Bank and IMF. African countries have paid back $550 billion of their debt but they still owe $295 billion. The difference, of course, is a result of compound interest. Countries cannot focus on economic or human development when they are constantly paying off debt. In addition, economic relationships between countries tend to benefit the wealthier countries. Some of the land in Cape Verde for example, could be planted and harvested to feed people but is planted instead with cash crops for foreign exchange. Due to indebtedness and foreign dependence, fresh produce is regularly sold or changed to a nonperishable type such as canned tuna for export rather than consumed by the population. Widespread malnutrition is one of the effects of this foreign dependency.[25] This is common around the globe. Brazil is the second largest exporter of agricultural products but 50% of its population is malnourished. Although Ethiopia has one of the largest populations of cattle in Africa, and much of the population suffers from malnutrition, the government continues to export large numbers of cattle to the Middle East. Even during the peak of the infamous 1985 famine, the government was sending dried meat to Egypt. Sen and Grown[32] call this denationalizing of the Global South. Foreign trade and business get in the way of the freedom of local governments.

This theory, similar to dependency theory, suggests that wealthy countries benefit from other countries and also exploit their citizens. This reflects Immanuel Wallerstein’s theory that suggests that how a country is integrated into the capitalist world system is the key feature in determining how economic development takes place in that country. The world economy is a system divided into a hierarchy of three types of countries: core, semiperipheral, and peripheral. Core countries (e.g., U.S., Japan, Germany) are dominant capitalist countries characterized by high levels of industrialization and urbanization. Semiperipheral countries (e.g., South Korea, Taiwan, Mexico, Brazil, India, Nigeria, South Africa) are less developed than core nations but are more developed than peripheral nations. Peripheral countries (e.g., most African countries and low income countries in South America) are dependent on core countries for capital, and have very little industrialization and urbanization. Core countries own most of the world’s capital and technology and have great control over world trade and economic agreements. Semiperipheral countries generally provide labor and materials to core countries. Semiperipheral countries exploit peripheral countries, just as core countries exploit both semiperipheral and peripheral countries. Core countries extract raw materials with little cost. They can also set the prices for the agricultural products that peripheral countries export regardless of market prices, forcing small farmers to abandon their fields because they can’t afford to pay the labor and fertilizer. The wealthy in peripheral countries benefit from the labor of poor workers and from their own economic relations with core country capitalists.[7][27]

Based on the changing nature of the world economy, production is divided into small pieces, each of which can be moved by a Transnational Corporation (TNC) to any country in the world that can provide the best deal on capital and labor. When moving businesses and factories to cheap labor locations, effort is not made to create better quality of living and development projects in poor countries. Strict laws protecting the environment and the rights of workers, which must be followed in the U.S. and Europe, do not have to be followed in many poor countries. This is attractive for a TNC so that bottom line profits can increase. In many factories, workers are often exploited by low wages, long hours, and poor working conditions. Wal-Mart factory workers in China report working fourteen hours a day for less than $3 per day in a hot room with only one fan. One woman described that rent was deducted from her wages, even after she moved out of the dormitory. During official inspection from outsiders, workers were taught how to lie about working hours and how to present fake pay slips. Workers also faced the threat of physical harassment from managers.[13] There are about 65,000 TNCs across the world today. TNCs continue to take materials and cheap labor from underdeveloped countries.

This article discusses the reasons why nearly 1 billion people continue to suffer chronic hunger despite the fact that there is sufficient food to feed everyone on the planet. It would serve as a good launching point for a discussion on global inequality.

This photobook depicts the locations where children sleep around the world and highlights the substantial inequality in the modern world.

Milanovic, B., 2010. The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality. New York: Basic Books.

Munger, F., ed., 2007. Laboring Below the Line: The New Ethnography of Poverty, Low-Wage Work, and Survival in the Global Economy. New York: Russell Sage Foundation.

The Bling Dynasty is an article in GQ that discusses how the newly wealthy in China are being taught to spend their wealth. It illustrates the tremendous and growing disparities in wealth that exist around the world.